This Phase I SBIR application entitled "Discovery and Development of Antidiabetic Drugs," proposes to establish assay systems to identify and validate small molecules that promote the function of the insulin receptor substrate 2 (IRS2) in mammalian cells. IRS2 mediates the action of insulin and insulin-like growth factor receptors upon biological processes that regulate nutrient homeostasis. Dysregulation of insulin action results in diabetes, a disease of growing concern that currently afflicts more than 16 million people in the United States alone. Basic scientific investigation conducted over the past several years reveals that IRS2 is an essential element in both peripheral insulin action and pancreatic beta cell insulin production. Since insulin secretion and action fail in people with diabetes, the rational discovery and design of small molecules that enhance the function of IRS2 might lead to fundamental improvements in the treatment and eventual cure of diabetes. This Phase I SBIR application is directed toward the discovery of chemical agents capable of activating the human IRS2 protein in cells. At the present time there are no known compounds approved for clinical use in the drug class which is being proposed in this application (namely activators of the IRS2 target protein), and none are even known to exist in pre-clinical testing at the present time. Therefore, success in this area will create an entirely new class of therapeutic agent for clinical applications to diabetes care. The SBIR funds will be used to establish and validate cell-based assays to identify small molecular entities that promote IRS2 signaling. Moroever, SBIR support will be used in part to retain outstanding chemical and biological scientists to conduct this program at the Company's laboratories in Michigan HPRL is a fully functional chemical and biological research laboratory that is equipped for modern molecular and cell biological studies, including high throughput screening. Support through the SBIR mechanism provides the opportunitiy to utilize the infrastructure at HPRL for novel and creative projects at the cutting edge of drug discovery and design. Since diabetes is a major chronic disease of epidemic proportions, pharmaceutical products developed by at HPRL will have large market opportunities world-wide.